A comprehensive break-even analysis entails
a. examining revenue-cost relationships and establishing sales forecasts.
b. analyzing marketing strategy.
c. the use of comparison pricing.
d. approximations of debits and credits.
Mark Michaels is the owner of Delectable Delights, a specialty store offering
chocolates, candies, and fruit baskets. After a recent analysis of the competitive
environment, Michaels concluded that three distinct consumer segments exist for his
products-A, B, and C consumers. In an effort to maximize the effectiveness of its
strategy, Michaels has decided to focus on fulfilling the needs of A consumers. He is
employing a ____________ strategy.
a. multisegmentation
b. selective
c. focus
d. concentration
Management and other key personnel “get a piece of the action” through
a. fringe benefits.
b. time-based compensation.
c. profit sharing.
d. tax benefits.
Failure to take cash discounts from suppliers
a. typically makes little difference to a firm’s financial well-being, since a business does
not pay a high rate for use of a supplier’s money.
b. typically makes a big difference to a firm’s financial well-being, since a business
pays a high rate for use of a supplier’s money.
c. has no effect on cash flow.
d. will result in negative credit reports.
The cash conversion period is the time between
a. placement of an order and cash payment for it.
b. receipt of inventory and cash payment for it.
c. cash payment for inventory and collection of accounts receivable.
d. sale of inventory and cash collection of accounts receivable.
The owner of a hardware store has agreed to sell his business to another local hardware
store owner. The purchaser would likely be described as a sale to a _________ buyer.
a. competing
b. employee
c. financial
d. strategic
A bank loan officer believes that a particular small business loan applicant is a typical
entrepreneur and, therefore, is
a. skilled in general management.
b. lacking in managerial expertise.
c. strongly oriented toward careful planning.
d. focused on financial management.
The negligent act is the ___________ of the loss in a tort liability claim.
a. circumstantial relationship
b. obvious injury
c. proximate cause
d. assumed basis
Small Business Administration loans include guaranty loans and loans directly from the
SBA.
Richard Hagelberg changed the name of his company because
a. he failed to protect its name by trademarking it.
b. the name of the company didn’t make a positive contribution to sales.
c. he had chosen a name that was already trademarked.
d. he wanted to capitalize on the name recognition associated with his Olympic gold
medals.
How much discount will a buyer receive if the buyer pays a trade credit bill of $60,000
with terms of sale of 2/5, net 30 on the net due date?
a. $0
b. $500
c. $1200
d. $3,000
It is most important that the marketing plan
a. identify user benefits.
b. show the degree of patent or copyright protection.
c. summarize the location of potential customers.
d. identify distribution channels.
Which of the following conditions is most likely to encourage the appointment of a
human resource manager?
a. Labor turnover rate is low.
b. Competition for personnel is low.
c. Employees are represented by a union.
d. There are 35 employees in the firm.
Susan Williams wants to know the various tasks to be performed by a new employee
before she looks for applicants. She should first
a. examine production data for current employees.
b. prepare a job description.
c. consult the United States Employment Service.
d. hire a temporary employee.
Which of the following franchisors has a well-implemented franchisee training
program?
a. Snap-on-Tools
b. WFC
c. CleanNet USA
d. McDonalds
The name Xerox is a
a. generic label.
b. brand.
c. trade dress.
d. copyrighted designation.
Controlling is the managerial function that involves the manager’s
a. thinking through issues confronting a firm and developing a plan to increase
productivity.
b. keeping track of performance and investigating when results are out of line.
c. developing an atmosphere of cooperation and teamwork.
d. keeping an optimum number of people under supervision.
A _______ is an independent firm or individual acting as a sales agent with the
responsibility for finding new franchisees within a specified territory.
a. multiple-unit franchisor
b. area developer
c. franchisor representative
d. master licensee
A partner in ABC construction business who invests in XYZ construction business that
is a direct competitor has violated his _________ duty to the ABC partnership.
a. agency
b. concomitant
c. fiduciary
d. intermediary
Auto Shine is introducing an improved version of its existing car wax targeted at luxury
car owners. The firm has decided to leave the original product in the mix and aim the
new product at the original target market. Auto Shine is employing a _____ product
strategy.
a. multiple products/one market
b. multiple products/multiple markets
c. modified product/one market
d. modified product/multiple markets
In seeking personnel for non-critical positions, small firms sometimes turn to
a. temporary help agencies.
b. leasing companies.
c. attorneys.
d. headhunters.
Adopting a consumer-oriented marketing philosophy is most consistent with
a. quickly gaining highly profitable market returns.
b. eventually achieving long-term market success.
c. the revenue stabilizing effect of large market shares.
d. focusing on the single most profitable consumer segment.
The _____ is a function of how efficiently management is using the firm’s assets to
generate sales.
a. total asset turnover
b. acid-test radio
c. fixed asset turnover
d. current ratio
Maurice has come to the conclusion that he needs increase his earning power. He is in
the ________ stage of the consumer decision making process.
a. information search and evaluation
b. problem recognition
c. post-purchase evaluation
d. purchase decision
Business planning
a. is an ongoing process.
b. is an exacting science.
c. equals business success.
d. is none of these.
An example of a fixed asset is
a. a delivery truck for sale by an automotive dealer.
b. inventory.
c. a delivery truck used by a grocer to deliver merchandise to customers.
d. short-term investments in stock.
The collection of product lines within a firm’s ownership and control is referred to as
the
a. product depth.
b. product accumulation.
c. product line consistency.
d. product mix.
Which of the following is not one of the major categories of e-commerce businesses?
a. Consumer-to-business
b. Business-to-consumer
c. Business-to-business
d. Auction sites
Formal control and function control in small corporations usually rests in ______
individuals.
a. a few
b. many
c. the same
d. a limited number of
When the channel system uses _____ , the storage function is transferred to the
intermediary.
a. agents
b. brokers
c. common carriers
d. merchant middlemen or wholesalers
Individuals are typically pulled toward entrepreneurship by the hope of obtaining
a. an easy life.
b. financial rewards.
c. freedom from long hours.
d. job security.
Kevin Chang believes that the nature of his business operations makes measurement of
performance almost impossible. Therefore, he wants to pay employees on the basis of
hours worked. The compensation system he should use is a
a. profit-sharing plan.
b. time-based compensation system.
c. commission system.
d. differential piece rate system.
A small electrical contractor with nine employees hears that they would like to join a
union. This contractor realizes that the firm
a. must follow the bargaining pattern set by large contractors.
b. can lawfully refuse to negotiate.
c. must negotiate if a majority of employees decide to unionize.
d. must deduct union dues from employees’ paychecks.
The number of employees who can be supervised effectively by a capable manager is
variable, depending on a number of factors.
Institutional advertising is primarily concerned with a company and its reputation.
You Make the CallSituation 1
The owner of two pizza restaurants in a city with a population of 150,000 is studying
her firm’s operations to be sure the firm is functioning as efficiently as possible. About
70 percent of the firm’s sales represent dine-in business, and 30 percent come from
deliveries. The owner has always attempted to produce a good-quality product and
minimize the waiting time of customers both on- and off premises.
A recent magazine article suggested that quality is now generally abundant and that
quality differences in businesses are narrowing. The writer advocated placing emphasis
on saving time for customers rather than producing a high-quality product. The owner is
contemplating the implications of this article for the pizza business. Realizing that her
attention should be focused, she wonders whether to concentrate primary managerial
emphasis on delivery time.
Question 1 Is the writer of the article correct in believing that quality levels now are
generally higher and that quality differences among businesses are minimal?
Question 2 What are the benefits and drawbacks of placing the firm’s primary emphasis
on minimizing customer waiting time?
Question 3 If you were advising the owner, what would you recommend?
List the basic principles in evaluating an insurance program.
To maximize sales and profits, a discount shoe store should create an atmosphere
similar to that of better department stores, with thick carpets, indirect lighting, and big
easy chairs.
An automobile dealer wants to use the modern management concept of work teams. To
do so, he should reduce direct supervision in the body shop.
Both purchasing and inventory management share the same objective.
“Second-stage” entrepreneurs are entrepreneurs who take over the operations of a
successful ongoing business from its founder.
Liquidity represents the degree to which a firm can meet maturing short-term debt
obligations with available working capital.
One of the primary functions of a business plan is to serve as a selling document-selling
your ideas and even yourself to others.
Because manufacturing firms are so closely tied to their customers, they are limited in
their ability to hold that which they offer over in the form of inventory.
Identify the key dates in the chronological sequence of a hypothetical working-capital
cycle. List these in order.
Since leasing companies typically employ hundreds or thousands of people, they can
afford to offer benefits superior to those offered by the typical small firm.
What are the qualifications of partners?
Because many small business owners have strong production skills, they often attend
mostly to the marketing side of the business to compensate.
One of the ways that the Internet has impacted small firms is by bringing new life and
technology to the management of customer service.
A milking machine in a dairy is a type of general-purpose equipment.
Measuring the weight of boxes of candy during a production process is an example of
attribute inspection.